Session of 1998
By Senator Salisbury
(By request)
          10             AN ACT relating to sales taxation; concerning the treatment of coupons;
11             amending K.S.A. 79-3602 and repealing the existing section.
13       Be it enacted by the Legislature of the State of Kansas:
14           Section 1. K.S.A. 79-3602 is hereby amended to read as follows:
15       79-3602. (a) ``Persons'' means any individual, firm, copartnership, joint
16       adventure, association, corporation, estate or trust, receiver or trustee, or
17       any group or combination acting as a unit, and the plural as well as the
18       singular number; and shall specifically mean any city or other political
19       subdivision of the state of Kansas engaging in a business or providing a
20       service specifically taxable under the provisions of this act.
21           (b) ``Director'' means the state director of taxation.
22           (c) ``Sale'' or ``sales'' means the exchange of tangible personal prop-
23       erty, as well as the sale thereof for money, and every transaction, condi-
24       tional or otherwise, for a consideration, constituting a sale, including the
25       sale or furnishing of electrical energy, gas, water, services or entertain-
26       ment taxable under the terms of this act and including, except as provided
27       in the following provision, the sale of the use of tangible personal property
28       by way of a lease, license to use or the rental thereof regardless of the
29       method by which the title, possession or right to use the tangible personal
30       property is transferred. The term ``sale'' or ``sales'' shall not mean the sale
31       of the use of any tangible personal property used as a dwelling by way of
32       a lease or rental thereof for a term of more than 28 consecutive days.
33           (d) ``Retailer'' means a person regularly engaged in the business of
34       selling tangible personal property at retail or furnishing electrical energy,
35       gas, water, services or entertainment, and selling only to the user or con-
36       sumer and not for resale.
37           (e) ``Retail sale'' or ``sale at retail'' means all sales made within the
38       state of tangible personal property or electrical energy, gas, water, services
39       or entertainment for use or consumption and not for resale.
40           (f) ``Tangible personal property'' means corporeal personal property.
41       Such term shall include any computer software program which is not a
42       custom computer software program, as described by subsection (s) of
43       K.S.A. 79-3603, and amendments thereto.

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  1           (g) ``Selling price'' means the total cost to the consumer exclusive of
  2       discounts allowed and credited, but including freight and transportation
  3       charges from retailer to consumer. As used in this subsection, discounts
  4       shall include any coupon or other similar indication of value used to re-
  5       duce the price paid by a consumer for tangible personal property whether
  6       or not the stated value thereof is reimbursed to the retailer by a third
  7       party.
  8           (h) ``Gross receipts'' means the total selling price or the amount re-
  9       ceived as defined in this act, in money, credits, property or other consid-
10       eration valued in money from sales at retail within this state; and em-
11       braced within the provisions of this act. The taxpayer, may take credit in
12       the report of gross receipts for: (1) An amount equal to the selling price
13       of property returned by the purchaser when the full sale price thereof,
14       including the tax collected, is refunded in cash or by credit; (2) an amount
15       equal to the allowance given for the trade-in of property.
16           (i) ``Taxpayer'' means any person obligated to account to the director
17       for taxes collected under the terms of this act.
18           (j) ``Isolated or occasional sale'' means the nonrecurring sale of tan-
19       gible personal property, or services taxable hereunder by a person not
20       engaged at the time of such sale in the business of selling such property
21       or services. Any religious organization which makes a nonrecurring sale
22       of tangible personal property acquired for the purpose of resale shall be
23       deemed to be not engaged at the time of such sale in the business of
24       selling such property. Such term shall include: (1) Any sale by a bank,
25       savings and loan institution, credit union or any finance company licensed
26       under the provisions of the Kansas uniform consumer credit code of tan-
27       gible personal property which has been repossessed by any such entity;
28       and (2) any sale of tangible personal property made by an auctioneer or
29       agent on behalf of not more than two principals or households if such
30       sale is nonrecurring and any such principal or household is not engaged
31       at the time of such sale in the business of selling tangible personal prop-
32       erty.
33           (k) ``Service'' means those services described in and taxed under the
34       provisions of K.S.A. 79-3603 and amendments thereto.
35           (l) ``Ingredient or component part'' means tangible personal property
36       which is necessary or essential to, and which is actually used in and be-
37       comes an integral and material part of tangible personal property or serv-
38       ices produced, manufactured or compounded for sale by the producer,
39       manufacturer or compounder in its regular course of business. The fol-
40       lowing items of tangible personal property are hereby declared to be
41       ingredients or component parts, but the listing of such property shall not
42       be deemed to be exclusive nor shall such listing be construed to be a
43       restriction upon, or an indication of, the type or types of property to be

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  1       included within the definition of ``ingredient or component part'' as
  2       herein set forth:
  3           (1) Containers, labels and shipping cases used in the distribution of
  4       property produced, manufactured or compounded for sale which are not
  5       to be returned to the producer, manufacturer or compounder for reuse.
  6           (2) Containers, labels, shipping cases, paper bags, drinking straws,
  7       paper plates, paper cups, twine and wrapping paper used in the distri-
  8       bution and sale of property taxable under the provisions of this act by
  9       wholesalers and retailers and which is not to be returned to such whole-
10       saler or retailer for reuse.
11           (3) Seeds and seedlings for the production of plants and plant prod-
12       ucts produced for resale.
13           (4) Paper and ink used in the publication of newspapers.
14           (5) Fertilizer used in the production of plants and plant products
15       produced for resale.
16           (6) Feed for animals, fowl and aquatic plants and animals, the primary
17       purpose of which is use in agriculture or aquaculture, as defined in K.S.A.
18       47-1901, and amendments thereto, the production of food for human
19       consumption, the production of animal, dairy, poultry or aquatic plant
20       and animal products, fiber, fur, or the production of offspring for use for
21       any such purpose or purposes.
22           (m) ``Property which is consumed'' means tangible personal property
23       which is essential or necessary to and which is used in the actual process
24       of and immediately consumed or dissipated in (1) the production, man-
25       ufacture, processing, mining, drilling, refining or compounding of tangi-
26       ble personal property, (2) the providing of services or (3) the irrigation
27       of crops, for sale in the regular course of business, and which is not
28       reusable for such purpose. The following items of tangible personal prop-
29       erty are hereby declared to be ``consumed'' but the listing of such prop-
30       erty shall not be deemed to be exclusive nor shall such listing be construed
31       to be a restriction upon or an indication of, the type or types of property
32       to be included within the definition of ``property which is consumed'' as
33       herein set forth:
34           (A) Insecticides, herbicides, germicides, pesticides, fungicides, fu-
35       migants, antibiotics, biologicals, pharmaceuticals, vitamins and chemicals
36       for use in commercial or agricultural production, processing or storage of
37       fruit, vegetables, feeds, seeds, grains, animals or animal products whether
38       fed, injected, applied, combined with or otherwise used; and
39           (B) electricity, gas and water.
40           (n) ``Political subdivision'' means any municipality, agency or subdi-
41       vision of the state which is, or shall hereafter be, authorized to levy taxes
42       upon tangible property within the state or which certifies a levy to a
43       municipality, agency or subdivision of the state which is, or shall hereafter

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  1       be, authorized to levy taxes upon tangible property within the state. Such
  2       term also shall include any public building commission, housing, airport,
  3       port, metropolitan transit or similar authority established pursuant to law.
  4           (o) ``Municipal corporation'' means any city incorporated under the
  5       laws of Kansas.
  6           (p) ``Quasi-municipal corporation'' means any county, township,
  7       school district, drainage district or any other governmental subdivision in
  8       the state of Kansas having authority to receive or hold moneys or funds.
  9           (q) ``Nonprofit blood bank'' means any nonprofit place, organization,
10       institution or establishment that is operated wholly or in part for the
11       purpose of obtaining, storing, processing, preparing for transfusing, fur-
12       nishing, donating or distributing human blood or parts or fractions of
13       single blood units or products derived from single blood units, whether
14       or not any remuneration is paid therefor, or whether such procedures are
15       done for direct therapeutic use or for storage for future use of such prod-
16       ucts.
17           (r) ``Contractor, subcontractor or repairman'' means a person who
18       agrees to furnish and install tangible personal property or install tangible
19       personal property at a specified price. A person who maintains an inven-
20       tory of tangible personal property which enables such person to furnish
21       and install the tangible personal property or install the tangible personal
22       property shall not be deemed a contractor, subcontractor or repairman
23       but shall be deemed a retailer.
24           Sec. 2. K.S.A. 79-3602 is hereby repealed.
25           Sec. 3. This act shall take effect and be in force from and after its
26       publication in the statute book.